DMP Advice

Midgard

Hi all,

I could really use some advice. Sorry for such a heavy first post, but here goes!.

I owe about £13,500 to 5 different creditors. I set up a DMP with Stepchange in July, agreeing to pay £238 per month.

Most creditors are playing ball and have reduced interest to nil, stopped charges etc.

There are two outliers.

Barclaycard have cut interest to 3%, not too bad, I can live with that.

The main problem I have is Lloyds. They blank refuse to stop interest and charges accruing on my current account (£6 overdraft usage fee, approx £36 a month in interest). To date they haven't agreed a plan with stepchange over my credit card either.

They have, however, said they will consider stopping the current account overdraft charges if I deal with them directly instead of using Stepchange. Seems worth it, but Stepchange insist I have to let them deal with all my creditors.

I'm currently trying to badger stepchange into convincing Lloyds to give way, but not getting very far, and few creditors will now correspond with me directly - only with Stepchange.

Part of the reason I went through Stepchange was to avoid the hassle, administrative burden and misery of dealing with 5 creditors myself. I also thought they might have more clout. Not so sure now!

I've seen people talk about self-managed DMPs before, but I'm very wary. I have a job where I can't have a CCJ, IVA or go bankrupt (defaults are ok).

Any advice very appreciated!

PS. In case it's useful, balances as follows:

Barclaycard £5,195
Lloyds Bank £2,435
MBNA £2,055
Lloyds Bank £1,545
Natwest £1,195
Capital One £970

EvianBackwardsIsNaive

Sorry this isn't a full and detailed response but I just wondered on the Barclaycard is the account still "open" and do you have access to any available credit on the card?

My debt with Barclaycard is a lot lower, and sits around £348 (I have other bigger ones) and it's not defaulted (but I have no access to a card and the credit limit is zero) and they have my interest at 2.95% and they won't go lower than that - I think it's just what they do and won't go lower.

I had a DMP with a company who I paid and they are going out of business / closing now so I am trying to manage it myself, I was overwhelmed when I started it a couple of years ago so just getting it off my plate really helped, and I just paid the monthly amount.

I'm now trying to continue it myself and most creditors / collection agencies have been helpful and understanding with me.

Weigh up how important your credit score is to you and you could always consider Full and Final settlements on some of the smallers ones if you could obtain a lump sum, I think just getting the number of creditors down helps massively.

I did go from around 13 down to 7 by making some F&F offers - Some as low as 30% were accepted - I always got the terms in writing to make sure my balance would be zero.

Although the credit report will show partially settled which isn't as good as just clearing it in full, it can sometimes be a better option to just save the money you would have spent - You could save a few thousand.

In my case I did it on defaults that are due to drop off between 1.5 - 2 years from now - I can't say for sure how good of a strategy that is, but for me it was more important to make the number of creditors manageable and to save overall.

You'd have to be more careful if you want to try and get a mortgage soon etc.

This isn't proper advice by the way, just a bit of a story from my experience.

I will say that if you CAN get the final accounts under the DMP and get it running smoothly it can save a LOT of stress - I'm better equipped now after a couple of years to take this on myself but I literally ran the plan for around 3 years and never got bothered by anybody in that time.

sourcrates

Hi,

There's a simple solution to dealing with Lloyds.

Go self managed, and stop paying them altogether.

Eventually they will sell the debt on to a debt collector, you can then add them to your DMP.

When creditors mess you about like this, simply remove them from the equation.

National_Debtline

Hi Midgard


Disappointing to hear that one creditor is refusing to come on board at all with the DMP. Are you quite sure that all activity on that current account has been stopped i.e. there are no monthly/annual Direct debits or Standing Orders yet to be cancelled? I'm just thinking out loud for reasons to justify the bank continuing to add "live" charges. Presumably you've not deposited any wages etc. into that Lloyds account since July at the very latest?


Dennis
@natdebtline

Midgard

EvianBackwards, as far as I'm aware my Barclaycard is still active and it still shows an available balance. I must admit, I haven't dared use it though!

National Debtline, I haven't used the Lloyds account for years, at least not properly. I used to pay money in to cover the charges, but there hasn't been any other activity for a long time.

I have since spoken to Lloyds again to make a complaint as I couldn't understand why they would apparently waive the charges if I dealt directly with them, but not if I dealt with them through Stepchange.

I shall summarise their response as follows:

The initial advice I was given by their collections team was wrong. The reason charges were continuing was because the account was on a 6 month plan to try and bring it back in order. They have since (with my consent) sent the account to recoveries instead, which allows them to stop the interest and charges. They warned me that this would mean I can't use the account, will mean default notices etc, wouldn't be the first default notice I've had so not too fussed about that.

They upheld my complaint due to the bad advice and gave me £50 for my trouble. £50 closer to being debt free :T. No interest or charges going forwards so happy days!:beer:

Magi74

sourcrates wrote: »

When creditors mess you about like this, simply remove them from the equation.

Basically this. Lloyds were the major thorn in our DMP and refused to cut interest rates - in fact we were paying more in interest than we were paying via the DMP. We ended up repeatedly asking (demanding?) that they default the loan. Eventually they did, but not without a lot of effort and cash down the drain.

(and yes, I am wondering how I can approach a complaint about them. It was a few years ago now and suffice to say my health was far worse then than it is now. It may be too late now)